I am not one of those who is against annuities, but even I would consider half to be way too big a percentage for most people to annuitize. I would think 25% to 33% of one's portfolio to be a pretty ample annuity for most who wish to buy one. Just my reaction and hey, what do I know.

Personally, I planned to put about 28% into an annuity until my recent windfall, which allows me a little more leeway. Now, instead of the annuity I will have a substantial chunk in Vanguard's Wellesley. I expect that Wellesley is unlikely to pay as well as an annuity but there are other advantages that are well discussed in other threads.

I am still grappling with annuitization so this if of interest to me, if you care to elaborate. PM if you'd prefer...TIA

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Depending on your age, an annuity may pay better than Wellesley. When my ER nestegg was just borderline and I was fighting with my spreadsheet, trying to figure out how to get my goal income, the only way I could seem to get that figure for ER was to work until 62 and take an fixed immediate lifetime annuity with inflation protection. I only have one child and so I wasn't worried about leaving a huge estate.

However, since my recent windfall I will have no problem reaching my goal ER income at all, even without an annuity. I think that for me, an annuity is something that I would have needed with a nestegg that was borderline sufficient, but that I no longer need. (If my investments do badly one year, so what - - I will no longer need a 4% SWR, and in the long run they will probably gain).

For me, the idea of giving up the money to an insurance company and never seeing it again is not a problem. However, what happens if the insurance company goes belly up? I'm not sure. Can they sell the annuity agreement to a less reliable company? I'm not sure. I happen to distrust insurance companies in general and I would find some answers to these questions if I were still to purchase an annuity.

Since you cannot change your mind after buying an annuity, it is worth thinking about how it fits into your overall financial plan's asset allocation and diversification.

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__________________Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

I have no idea what my expenses in retirement will be, I don't even know where I will live. I will sell my current house because it has too many stairs and the basement leaks. So I need to sell and buy a house, move and don't know even what utilities might be in a new place. I figure if the people living in a town have an average income of 30K and I have more I will get by. The big question is medical cost, I might have a problem buying insurance at any cost so go with a very high deductible.
I will plan my budget to have more than I could spend for housing and utilities and some for transportation and wants with a generous margin then if I can't make it I can cut back on wants or find a way to earn a little money. I figure if I had a home paid off I could cover property tax, utilities and keeping a car buying food and minor needs on under 2K a month and SS will pay about 1,200 and a roommate about 800 so I am about at break even before medical or using any lifesavings after 62. I will be 60 next month so waiting for 62 might let me save a little more giving me maybe 400K and a paid off home which should cover medical cost. I could inherit someday but not a lot and not for sure mom has a little but she might spend it all before she goes and I might be 80 before she dies, she was 80 when her mom died.

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